INDIANAPOLIS
— This is an exciting time for Jeff Smulyan,
the chairman, president and CEO of Emmis Communications.

The
push is on to promote radio in new Sprint smartphone models that come
with the free NextRadio App. Some 13,000 people had launched the
NextRadio app on their Sprint HTC One and HTC Evo smartphones as of
early September, according to Emmis.

The
number was increasing daily, the company said, and is expected to
rise sharply as consumers buy more phones and as wireless company
Sprint, phone manufacturer HTC and broadcaster Emmis-owned NextRadio
conduct a beta eight-city marketing rollout.

Emmis
Senior Vice President/Chief Technology Officer Paul Brenner expected
the test to go live shortly before the Radio Show convention. Phones
have been provided to 40 DJs at stations owned by various groups in
those eight markets so they’ll talk about NextRadio on-air, online
and on social media. A total of about 14 radio group owners are
involved. Sprint and HTC support the effort with their own marketing
plans targeting radio.

The
NextRadio App does not use a streaming signal to deliver station
audio. Instead it provides local over-the-air reception in phones
with enabled FM chips — and adds interactive features, if stations
opt to support them, such as buy song, rate song, social media
coupons and geo-location services.

“If
that app is active, you have access to all stations in the listening
area,” said Brenner, who added that approximately 2,000 stations
had been tuned to through the app as of early September.

“We
can see what they’re listening to, for how long and on which
stations. User data shows about 15 percent of Sprint customers who
buy the new HTC phone are launching the NextRadio app.”

With
its Web-based interface, stations can use Emmis’ TagStation to
provide data services for radio broadcasting,
and deliver interactive elements to the NextRadio app. With the
basic, free level of integration, stations can upload branding images
to display default artwork in the NextRadio app, as well as call
letters, format, station name and slogan.

More
than 2,000 stations had signed up for the free level as of early
September; and radio groups like Beasley, CBS Radio, Entercom,
Greater Media and Hubbard had registered for the additional services
like album art and artist information, listener feedback, song
tagging capabilities, enhanced advertising options and social
integration through TagStation. If stations don’t participate,
their audio will still be heard via the app, with no enhancements.

While
Brenner has handled the station infrastructure and development part
of the Emmis agreement with Sprint to enable FM chips, Smulyan
managed its legislative and business facets. Smulyan championed radio
capability in cellphones for five years before the Sprint deal was
announced in January. He calls the project “the ultimate labor of
love.”

Jeff
Smulyan spoke to Radio World News Editor/Washington Bureau Chief
Leslie Stimson about the effort.

Smulyan:
There’s been unprecedented support; just about everybody in the
industry has chipped in to contribute to the $15 million [in ad
inventory] to Sprint.

That
was step one, raising the money for Sprint on an annual basis. That
level of support, frankly, blew me away. I think, of the top 75
groups we have 70 of them. A couple are still considering, and
thousands of small stations, all saying, “I want to do my fair
share.” I think that’s probably the most unusual…given, at
least in the 40 years I’ve been in this in business. So, that’s
number one.

The
second part, and this is really the most interesting part, is now we
want to … roll this out. It’s going to take awhile, because,
while we have 2,500 stations with either their logos on the phones or
[using] TagStation, we would love every station in America to use
either TagStation or build their own interactive system, but make
radio truly interactive on smartphones. So that people can see album
art. They can get liner notes on albums. They can buy music. They can
share information with their friends. They can call into talk shows.
They can enter text to win contests. They can rate records. They can
download coupons and use location-based services and calendaring.

There’s so many
things that our audiences can do to interact with us on a local basis
that we think will make their experience with radio much better. But
it’s up to all of us to build an ecosystem that does that.

Now,
of the 12-to-13,000 radio stations, we want to get a lot of them
really involved. We hope every radio station in America, public or
private, will find new ways to engage with their audiences because we
think it’s a game-changer for our industry.

RW:
Public or private meaning you want noncommercial stations involved as
well?

Smulyan:
We’ve had wonderful discussions with NPR and MPR [Minnesota Public
Radio]. Everybody’s looking at this as a new way to relate to our
listeners in a device where we don’t go through the data networks,
which cost all of us money; it makes it free for our audiences
through the terrestrial system and in the device that 300 million
Americans carry with them every day.

That’s
the goal. We want people to know they can get radio when they’re
carrying their cellphone, as they all do every day.

RW:
How will the stations promote this?

Smulyan:
It’s up to each individual station. We hope everybody will do
contests with listeners. … We want to capture the imagination of
every individual station in America to promote it.

RW:
So it was a monetary and on-air commitment.

Smulyan:
We want people to engage their audiences with this device. Leslie, 20
years ago we sold 40 million Walkmen a year. We don’t sell them
anymore. This is the Walkman of the future. This is the one
device that every American carries with them every day.

RW:
As stations sign up for NextRadio, how does that work for the
consumer?

Smulyan:
If you walk into a Sprint store [and] you buy an HTC, this is the
first phone it’s being introduced on. But it will be introduced to
their whole product line — if you do that, the NextRadio app will
be there. So when you turn your phone on, you look for it and you hit
it and the radio comes on. Wherever you live, it will populate with
radio.

Also,
if you own an HTC phone from Sprint that you bought in the last few
years, you can also download that app at the Google Play store. The
great majority of this process will be in phones that people are
buying now.

RW:
They’ve also introduced a special red HTC.

Smulyan:
Yes, and you’ll see some fun things, but, I think it’s really up
to us now. We’ve been in industry that people have kicked around
for a long time. This is our chance for this industry to really fight
back. There’s a reason we reach 275 million people a week.
It’s because people do care about what we do, and we’ve got to
drive that point home.

RW:
You mentioned this is the introduction to Sprint product line. Have
you and Sprint been talking about starting with these models and then
moving onto others?

Smulyan:
Yes, this is just the first phone. I’ll leave that to Sprint to
announce the others.

RW:
And you’re talking to other carriers as well?

Smulyan:
We will continue dialogue with every carrier. My goal, and I’ve
said this for years: We want to be in 300 million phones in the
United States. Sprint has been a wonderful first partner. It’s a
major, major breakthrough to have a partner like Sprint.

RW:
On the station side, we’ve talked about the app, but there’s also
the back-end infrastructure, the TagStation system to insert and
track ads and associated data all the way from the automation system
to broadcast.

Smulyan:
TagStation is sort of the first provider of interactivity. When we
started this process, other people were doing that interactivity.
They’ve sort of dropped out of the business so we’re the only
one. But, I want to stress to people they don’t have to go through
TagStation. They can build their own. I’m sure other vendors will
crop up. But we I hope they’ll do it. I hope they’ll go to
TagStation or build their own, so that every broadcaster can have
their own interactivity with their listeners. We think it’s
critical.

[Ed.
note: Non-Emmis stations that want enhanced content to appear on the
NextRadio app need a licensing agreement with Emmis plus its
TagStation software, or must build their own source content solution
that complies with the mobile app capability and obligations for
inventory, reporting and processing mandated by Sprint. With
TagStation software, the audio is synchronized with visual elements.]

RW:
Is the station infrastructure built out for that?

Smulyan:
Yes, we have hundreds of stations on TagStation now and many more
online. The ramp-up takes a little time.

RW:
You’ve had much work going on. Now, additional things need to
happen.

Smulyan:
Exactly right and I think we listed the companies [see the story
introduction], some of them have already set up their enhanced
functions. So if you buy a smartphone from Sprint, and there’s a
CBS Radio station or a Beasley station, or Hubbard station, or
Greater Media station or Emmis station, all the interactivity will
pop up on day one.

RW:
About the interactivity on the display. Those stations are poised to
make money off enhanced ads, right?

Smulyan:
Right, and that will be starting. We know it’s going to take a
little while to ramp that up. But the capability’s there now. If
you’re WTOP in Washington and you sell McDonald’s an interactive
ad, people can download the coupon when they buy the phone.

RW:
That’s cool.

Smulyan: That’s my motto for this — “cool and
free.” … When people see this app, they say, “That’s cool.
That shows me radio in whole new way.” The second part is, it’s
free. Not only does it consume a third of the power consumption of
streaming, we have no data charges. Every time I stream audio, I pay
money to buy bandwidth. And my audience pays money to buy bandwidth.
They’re starting to understand that bandwidth has caps. And when
they go over caps, it costs them more money. That’s why we think
this is so important.

RW:
As cars come on the lots with big-screen infotainment systems, how
will this look on the display? Will it look like what Pandora and
other streamers are doing?

Smulyan:
Absolutely. Even cooler. And remember, all of
this was done with the suggestion of Kevin Gage [NAB executive vice
president and chief technology officer] several years ago, who said
we have got
to compete in the auto of the future and the smartphone of the future
with an interactive display. Now, we were the ones who happened to
build it. We put our hand up and said, “We’ll build that.”
That’s really key.

RW:
So radio’s going to look better in the dash or in your handheld
smartphone. You’re going to bring back the cool factor. And now
you’re charged with getting as many stations as possible on board?

Smulyan:
Right. We want to get every radio broadcaster in America. Remember,
the key to the NextRadio system is it is
agnostic. It favors no station. Every station in America is
displayed. And how they’re displayed is up to them.

We’re
making sure that their logo, their station graphics are totally free.
All they have to do is download their logo.

We
hope they’ll do interactivity as well. When people turn on the
radio, we want them to see all the stations, all their logos, all
their slogans, all their formats. That requires no expense by a
broadcaster. We hope every broadcaster will want to do interactivity,
but even … if you don’t do anything, your frequency and your call
letters will show up; but the screen will be blank. We’re saying,
“Let’s not leave a blank screen for our listeners.”

RW:
Are you talking with Sprint about special promotions for the fourth
quarter?

Smulyan:
We’re working on all sorts of things. The answer is “yes” to
any question you ask about talking to Sprint.

RW:
Circling back to the money, how much has each station pledged?

Smulyan: We did a formula based on everybody’s revenue
and what was a fair share. Without getting into each company, of the
70 radio groups participating, they’re participating as to their
fair share based on their industry revenues. Of the largest 75 radio
groups, I believe we have 70 committed to this project.

RW:
And the Sprint deal was $15 million in advertising inventory a year
for three years in exchange for Sprint putting the FM app in at least
30 million phones?

Smulyan:
Yes, and we believe that after three years —
we don’t plan to pay anymore. We believe that this will be such an
important part of the ecosystem that everybody will be clamoring to
have this.

RW:
You’re thinking the feature will become so popular that Sprint will
put FM in more models and other carriers will want to do this, too.

Smulyan:
Right.

RW:
Is that because Sprint shares in the revenue along with the station
when someone downloads a coupon or takes some other type of action?

Smulyan:
Right. They’re 30 percent of the enhanced
ads. That’s because we’ve got to go back through their
architecture. To download a coupon, you’ve go through their
architecture.

RW:
Emmis gets some of that too, right?

Smulyan: Emmis is managing — we get a fee for managing
all the traffic of all of the enhanced ads — just the enhanced ads.

RW:
As opposed to the plain ads.

Smulyan: If you run just your regular ad, that’s 100
percent the station’s money… Sprint doesn’t get anything. Emmis
doesn’t get anything.

Let’s
assume you sell an ad campaign to McDonald’s for Egg McMuffins,
[the] same campaign you’ve been selling to McDonald’s for 50
years. That just stays on the station, we just hope more people see
it and listen to it because they have a cellphone in their hand.

But
if you sell an additional coupon to McDonald’s that downloads when
people hear the ad and see the ad, that goes through Sprint
backchannel. And by the way, you ought to be able to charge a lot
more for that enhanced ad than you would for a normal audio ad. That
is where Sprint gets 30 percent and we will manage it.

RW:
The backchannel is when Sprint sends the listener something in
response to an action the listener has taken, like downloading a
coupon.

Smulyan: Yes. On that phone when it downloads to the
listener, and that coupon comes up and you take that coupon to
McDonald’s and redeem it. The backchannel gives our one-way medium
two-way capability.

RW:
So you’re doing FM analog. What about HD Radio?

Smulyan: We’re hopeful that’s coming — one step at
a time. [IBiquity President/CEO] Bob Struble and I are brothers in
arms on this whole process. We think that, ultimately we can do more
with data and rich audio and video through HD, but we have to take
the first step with analog.

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